Zell scholar Milind Kopikare '11 measures the impact of smart-grid technology
By: Sara Langen
|Milind Kopikare '11|
If someone told you that adjusting the temperature on your thermostat plus or minus two degrees could reduce greenhouse gas emissions and save you money on your utility bill, would you do it?
Milind Kopikare '11 is hoping you, and many others, will say yes.
Kopikare received a $25,000 scholarship from the Zell Center for Risk Research to study the impact of smart-grid technology in Princeton, Ill. Having worked in the field while developing wireless devices as a systems architect with Marvell Semiconductor, Kopikare wanted to answer the biggest question facing smart-grid implementations: Is it cost-effective?
Kopikare discovered that the system is indeed expensive — but that when utilities share infrastructure and involve consumers in the process, smart grid is an achievable outcome.
Kellogg World: What is a smart grid?
Think of it as a communications network imposed on top of our current utility network that allows you to track excess energy consumption in real time and translate it into dollars you could have saved.
KW: Why is smart grid particularly relevant now?
The U.S. is the largest energy consumer in the world. Renewable energy, such as solar or wind power, are good alternatives to fossil fuels, but they barely supply 1 percent of U.S. energy needs. So the question governments all over the world are asking is, "Can we do something right now that can translate to better savings in fossil fuel consumption?" Today, we waste as much as 30 percent of our electric energy consumption. Smart grid, if done right, can prevent this wastage.
KW: How did the Zell scholarship affect your research?
Financially, it was a great thing. But what it really did was give me an official medium — and access to resources — to pursue my research on the costs and financial implications of smart grid. Kellogg professors Ravi Jagannathan, the Chicago Mercantile Exchange/John F. Sandner Professor of Finance, Paola Sapienza, the Merrill Lynch Capital Markets Research Professor of Finance, and PhD student Athreya Sampath brought an incredible financial perspective that was the cornerstone of my analysis. I also received access to American Public Power Association leaders, the City of Princeton's mayor and the city's utility head. At the time, the city had just received a grant from the Obama administration for deploying smart grid — and they were looking for someone who could help them figure out a cost-benefit analysis. I think the Zell scholarship helped set me up with the perfect partners.
KW: What were your findings?
We found that there is a huge cost in deploying a smart grid — about $1,000 per house. At that cost, the project might present an economic challenge for small towns such as Princeton. However, we found that if many small neighboring cities share the infrastructure, then the savings would outweigh the costs within five years. We also conducted household interviews and found that consumers were willing to pay part, or all, of the costs if the savings paid off within five years, which it would. We thus provided a financially feasible utilities framework for smart grid deployment. The APPA published our findings and awarded us with the DEED prize for innovating in energy efficiency.